Muller Milk & Ingredients has decided to close its small dairies in Aberdeen and East Kilbride, affecting a total of 225 jobs in Scotland.
Muller said that it is closing the two plants because “both are operating well below full utilization”.
Utilization, in this context, refers to how well or badly a company is making use of its resources.
The dairy giant will cease operations at its Aberdeen plant as soon as is “reasonably practical”, expected to be mid-June, while its East Kilbride plant will continue to operate for the next 18-24 months “to allow time to transfer production lines” across to operations in Bellshill, North Lanarkshire.
Muller is investing £15 million over three years at its Bellshill plant. The investment will include a new cream filling hall, high-speed production lines, expansion of site processing capabilities and investment in site infrastructure.
Andrew McInnes, Managing Director of Müller Milk & Ingredients said:
“We recognise that this change will affect our colleagues at both sites and farmers in the North East but this announcement is a key step towards building a sustainable, diverse and future focused dairy business in Scotland and the UK
“Unfortunately the status quo was not sustainable within our Scottish dairy network, with both Aberdeen and East Kilbride dairies operating well-below capacity. By investing in Bellshill we will be better able to optimise the value in the milk we buy from dairy farmers.”
“Wherever possible we will offer employees the opportunity to relocate within our network. We will support those who do not wish to do so or for whom there are no roles within our business and we have asked local agencies to work with us in this regard.”
All 43 farmers currently supplying milk to the Aberdeen dairy will be able to continue doing business with Muller, but they will be required to pay a charge of 1.75ppl – reflecting the cost of transporting the milk they produce from Aberdeen to Bellshill for processing.
Meanwhile, those who don’t want to continue supplying can avoid the charge and their contracts will terminate on expiry of 12 months’ notice – giving the farmers time to make alternative arrangements.